Xenergy energy drink past CEO, Russell Pike, served five years for money laundering. The troubled past of Pike and Purchasepro.com, an internet auction company, started in 2001. Charles Johnson, chief executive of PurchasePro, was accused of Pike of stealing his internet auction company business plan.
Pike is now involved in another bankruptcy proceeding and Johnson has been charged with securities fraud.
The key sponsor to the Ultimate Fighting Championship is Xenergy energy drink. Pike founded and was the CEO of Xyience. They manufacture and distribute nutritional supplements and are known for their famously popular energy drinks.
The reason why a local Las Vegas, Nevada company has become news worthy, is based on the current owners of the UFC Lorenzo and Frank Fertitta. They also started Station Casinos Las Vegas.
One of the main facts cited for Xyience’s downfall is their marketing budget of $50 million and only had $109,000 in sales during 2004.
At the beginning of 2004, Xyience was sued by its shareholder for not having a voice in the company.
Toward the end of 2007, California Department of Corporations started investigations into Pike’s sales of Xyience shares illegally in California. This is a small portion of legal and financial battles for two decades.
Pike resigned from Xyience in late 2006, and at that point they needed monthly sales of $8.5 million for break event.
At this time in Xyience’s history, it owed $18 million to lenders and $25 million to trade creditors. The company had grown to 88 employees.
During January, Pike filed against Xyience an involuntary bankruptcy judgment. Xyience followed this with a voluntary Chapter 11. At that time, there only had $5.3 million in assets with $42 million in liabilities.
The energy drink company is still operating with a $2.6 million loan from the Station Casinos owners.
Xyience will be purchased at $15 million if no other bidders place a higher bid. Source Review Journal